Just a brief note to wish all my readers a Happy Thanksgiving. May you spend the day with good food, good family and good friends. And a good nap after all that Turkey! We’ll be back with you next week.

While we’re looking at lists, the Urban Land Institute recently published its Best Investor Bets for 2010. The list is full of the usual suspects – New York, Washington DC, Austin, Houston. Tucked into the second set of five, however, is our very own Raleigh-Durham. The Institute believes we’ll be successful in 2010 by playing to our strengths as a biotech incubator and our foundation of excellent universities.

This is great news. What makes that even better is that most of the other nine cities are large metropolitan areas [the exceptions are San Jose, which is basically a suburb of San Francisco, and Austin, which is in many ways a clone of the Triangle]. It says a lot for our hometown that we can hold our own when “playing above our weight class”

That is a debate which will probably go on forever — right alongside Duke vs UNC vs State and Ginger vs Mary Ann.

Last week, the Milken Institute added another data point when they released their list of Best Performing Cities for 2009. tucked in comfortably at #6 is our fair city. Durham did well in job growth and in high-tech GDP in 2008. According to Milken, we’ve even handled the storms of the past year relatively well, with only a modest job contraction — ranking Durham at 54th out of a group of 200.

Where was Raleigh? Four spots down in 10th place. Raleigh also did well in most categories, but the job contraction of the past year [where it ranked 124th out of 200] really dropped the overall score. That ranking is certainly nothing to sneeze at and it is very possible the roles will be reversed in 2010, but for now, we’ll enjoy our place in the sun.

I wanted to take a moment to invite all my readers to my Open house this Sunday. From 3PM to 5PM this Sunday [November 15] I will be showing my listing at 1824 Birmingham Avenue to all who stop by. As I mentioned in my earlier post, this home is a beautiful 4 bedroom/1.5 bath built by builder George Birmingham as his personal residence. Built in the 1930s, this home has all the charm of an older home, but is as solid as a home built yesterday [if not moreso]

For more information about this home, click here. Offered at $129,000, this is a perfect opportunity to purchase a large home with a large lot and take advantage of the extended tax credit. I hope to see you tomorrow.

[if you can't make it tomorrow, but would still like to see this beautiful home, email me and we'll find a good time for a private showing]

In all the sound and fury about the extension of the First Time Homebuyer’s Credit, you might have missed the news from Fannie Mae. Last Thursday, Fannie Mae announced a new program to allow troubled homeowners a chance to stay in properties threatened by foreclosure. Under the program, homeowners would transfer ownership of the property to Fannie Mae [a "deed-in-lieu of foreclosure"]. Fannie Mae would then allow the [now former] homeowners to sign a lease for up to one year to remain in the property. As you might expect, there are a number of conditions;

1. You must have a mortgage owned by Fannie Mae. If you aren’t sure, you can check here to see if your loan is owned or backed by Fannie Mae.
2. You must be behind on your current mortgage.
3. You can not qualify for a loan modification under current Federal guidelines.
4. You must qualify for a deed in lieu of foreclosure under Fannie Mae guidelines
5. You must demonstrate that you can afford a market rent. Generally this means that the market rent is less than 31% of your monthly gross income.
6. Any subordinate lien [a second mortgage, HELOC, etc] must be released by payment in full or some other arrangement.

This program is similar to one offered by Freddie Mac. The main difference is that Freddie Mac is signing month-to-moth leases to allow homeowners to stay in the home while Freddie Mac finds a new buyer.

Both of these programs will certainly advance the Government’s immediate goal of helping people stay in their homes — at least for a little while. It will, however, make the Federal Government a landlord for an increasing number of properties. Both Fannie and Freddie expect to hire management companies, but it is still one more bureaucracy in companies stretched to the limit already.

The second thing these programs will do is delay the needed and eventual adjustment of the housing market. With Fannie delaying the sale of these homes for a year [or possibly more] becomes even more of the long drawn out pain instead of the short sharp adjustment the economy needed.

What do you think? do these programs help or hurt the overall economy?

Earlier today, President Obama signed legislation that extended and expanded the first time homebuyer’s tax credit. Here are the details on the restructured credit;

• The $8,000 [or 10% of the purchase price, whichever is less] first time homebuyer’s credit is extended under the same basic rules as now. To take advantage of the credit, homebuyers much have a property under contract by April 30, 2010 and close on that property by June 30, 2010.
• There is a new $6,500 [or 10% of the purchase price, whichever is less] tax credit for current homeowners. To qualify, you must have owned the same property for five consecutive years of the previous eight. The same deadlines apply [under contract by April 30, close by June 30].
• The purchase price of an eligible property must by under $800,000.
• The income limits for the credit have increased to $125,000 for single taxpayers and $225,000 for married taxpayers filing jointly. There is a phase-out period above that with the credit phasing out completely at $145,000 for single taxpayers and $245,000 for joint taxpayers.

Over the last few months, I’ve heard from many people who wanted to take advantage of the $8,000 credit, but had old problems that prevented them from getting a mortgage by the end of November. Now, those people have another six or seven months to take advantage of this historical opportunity for home ownership. If you would like to explore how you could buy your first home, or move up to a larger one, please email me and we’ll get started

I’ve talked to several real estate brokers over the past month who have observed a market stall during October — fewer showings, fewer offers and generally less excitement about the market. Do the numbers support their observations? Let’s take a look.

For all of Durham County there were 1871 houses listed at the end of October. 228 sales closed in October, so at that pace the currently available inventory would be sold in 8.2 months. This is a drop of 1.6 months of inventory, which brings us back to the level we were at in August. Not the glory days we had in June/July, but
still some good solid numbers.

For the 27713 area code there were 344 homes listed at the end of October. 55 homes sold during October, so the current listings would be sold through in 6.3 months. Again, this pulls us back to the levels we were seeing in August, and makes the South Durham market fairly balanced. Can we get back to the brief seller’s market of the summer? Probably not this year, as sales during November/December are traditionally slow. Staying here, however, would be pretty good.

Here’s a look at the communities we’re tracking. If you would like to see data from your community, please let us know in the comments.

Again, once you get past the top 3 developments, sales are spread out greatly with 32 subdivisions reporting at least one sale in October. Woodcroft, which was a shining star for much of the year, is stubbornly stuck in the 7s [I
had expected it to drop towards the 5s two months ago]. This also is the second month in a row that no sales were recorded in Colvard Farms.

As of today, the $8,000 first time homebuyers’ credit is set to expire on November 30. To take advantage under the current rules, almost all buyers would already have a home under contract. This would imply that November sales would be strong. Pending sales figures seem to support this, but we will see how many of those pending sales close in November. There is also news about an extension of the credit, but that is for another post.

[Data for this post was pulled from the Triangle Multiple Listing Service on November 1 at about 9:00 AM]